Which of the following is an effect of an increase in the price level in an economy?
What will be an ideal response?
The real value of dollar-denominated assets will fall.
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When crowding out occurs, it ________ the effectiveness of ________ fiscal policy.
A. increases; expansionary B. reduces; contractionary C. reduces; expansionary D. increases; contractionary
If the government wants to reduce the burning of fossil fuels, it should impose a tax on
a. buyers of gasoline. b. sellers of gasoline. c. either buyers or sellers of gasoline. d. whichever side of the market is less elastic.
The experience of the 1930s indicates that substantial tax increases during a severe recession will result in
What will be an ideal response?
Total revenue falls as the price of a good increases if price elasticity of demand is
a. Perfectly elastic b. Inelastic c. Unitary elastic d. Elastic